Chemical Company DuPont Shines In Q2: Earnings Beat, Boosts Outlook

DuPont De Nemours, Inc. (NYSE: DD) shares are trading higher after the company reported better-than-expected second-quarter adjusted EPS and sales.

Sales rose 2% Y/Y to $3.171 billion, beating the consensus of $3.049 billion. Organic sales remained flat Y/Y, with a 2% increase in volume offset by a 2% decrease in price.

Organic sales by region YoY: EMEA -7%, U.S./Canada -2% and Asia Pacific +3%.

DuPont's operating EBITDA rose 8% Y/Y to $798 million, and its margin expanded by 130 bps Y/Y to 25.2%.

Electronics & Industrial sales totaled $1.508 billion (+15% Y/Y), and the operating EBITDA margin expanded by 120 bps Y/Y to 27.8%.

Water & Protection sales were $1.391 billion (-7% Y/Y), and the operating EBITDA margin expanded by 10 bps Y/Y to 24.7%.

Adjusted EPS for the quarter was $0.97 (+14% Y/Y), beating the consensus of $0.85.

Operating cash flow from continuing activities for the quarter was $527 million, compared to $400 million a year ago. Adjusted free cash flow was $425 million (+53% Y/Y). As of June-end, DuPont held cash and equivalents of $1.51 billion.

Lori Koch, DuPont Chief Executive Officer, said, “Earlier this week we announced the closing of the Donatelle acquisition which expands our healthcare offerings through enhanced expertise in medical device markets closely related to the Spectrum business which we purchased last year.”

“In addition, we are advancing our strategic priorities and have made progress in planning key actions and milestones related to our previously announced intent to separate our electronics and water businesses.”

Q3 Outlook: DuPont expects net sales of ~$3.20 billion versus the consensus of $3.20 billion, and Adjusted EPS of ~$1.03 against the consensus of $1.01.

Antonella Franzen, DuPont Chief Financial Officer, said, “For the third quarter of 2024, we expect a return to year-over-year organic sales growth for DuPont led by E&I with sales and earnings growth expected from W&P beginning in the fourth quarter.”

2024 Outlook: DuPont raised the outlook for adjusted EPS to $3.70 – $3.80 (from $3.45 – $3.75) versus $3.63 consensus and revenue of $12.40 billion – $12.50 billion (prior $12.1 billion – $12.4 billion) versus $12.26 billion consensus.

In May, the company announced its plan to split into three distinct publicly traded entities. The separation will include its Electronics and Water businesses, executed in a tax-free manner for shareholders.

After the separation, New DuPont will continue as a premier diversified industrial company, while Electronics and Water will benefit from increased focus in their industries.

The separations, expected to be tax-free for U.S. shareholders, should be completed within 18 to 24 months, subject to customary conditions and regulatory approvals.

Related: DuPont’s Strategic Split Could Unlock Value, But PFAS Risks Loom Large, Says BofA Analyst

Price Action: DD shares are up 4.50% at $84.03 premarket at the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.